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The market value of Fords' equity, preferred stock and debt are $7 billion, $1 billion, and $10 billion, respectively. Ford has a beta of
The market value of Fords' equity, preferred stock and debt are $7 billion, $1 billion, and $10 billion, respectively. Ford has a beta of 1.7, the market risk premium is 8%, and the risk-free rate of interest is 5% Ford's preferred stock pays a dividend of $3.50 each year and trades at a price of $30 per share. Ford's debt trades with a yield to maturity of 9.5%. What is Ford's weighted average cost of capital if its tax rate is 25%? OA. 14.21% OB. 12.43% OC. 11.84% OD. 13.02%
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Behavioral Finance Psychology Decision-Making and Markets
Authors: Lucy Ackert
1st edition
324661177, 978-0538752862, 538752866, 978-1111781675, 1111781672, 978-1133455486, 978-0324661170
